Correlation Between Ligitek Electronics and AVerMedia Technologies
Can any of the company-specific risk be diversified away by investing in both Ligitek Electronics and AVerMedia Technologies at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Ligitek Electronics and AVerMedia Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ligitek Electronics Co and AVerMedia Technologies, you can compare the effects of market volatilities on Ligitek Electronics and AVerMedia Technologies and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Ligitek Electronics with a short position of AVerMedia Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ligitek Electronics and AVerMedia Technologies.
Diversification Opportunities for Ligitek Electronics and AVerMedia Technologies
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ligitek and AVerMedia is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Ligitek Electronics Co and AVerMedia Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AVerMedia Technologies and Ligitek Electronics is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Ligitek Electronics Co are associated (or correlated) with AVerMedia Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AVerMedia Technologies has no effect on the direction of Ligitek Electronics i.e., Ligitek Electronics and AVerMedia Technologies go up and down completely randomly.
Pair Corralation between Ligitek Electronics and AVerMedia Technologies
Assuming the 90 days trading horizon Ligitek Electronics Co is expected to generate 0.89 times more return on investment than AVerMedia Technologies. However, Ligitek Electronics Co is 1.13 times less risky than AVerMedia Technologies. It trades about 0.11 of its potential returns per unit of risk. AVerMedia Technologies is currently generating about 0.06 per unit of risk. If you would invest 1,523 in Ligitek Electronics Co on October 23, 2024 and sell it today you would earn a total of 3,907 from holding Ligitek Electronics Co or generate 256.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ligitek Electronics Co vs. AVerMedia Technologies
Performance |
| Timeline |
| Ligitek Electronics |
| AVerMedia Technologies |
Ligitek Electronics and AVerMedia Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ligitek Electronics and AVerMedia Technologies
The main advantage of trading using opposite Ligitek Electronics and AVerMedia Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ligitek Electronics position performs unexpectedly, AVerMedia Technologies can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in AVerMedia Technologies will offset losses from the drop in AVerMedia Technologies' long position.| Ligitek Electronics vs. Johnson Health Tech | Ligitek Electronics vs. BRIM Biotechnology | Ligitek Electronics vs. Medigen Biotechnology | Ligitek Electronics vs. GeneReach Biotechnology |
| AVerMedia Technologies vs. Clevo Co | AVerMedia Technologies vs. Zinwell | AVerMedia Technologies vs. Gigastorage Corp | AVerMedia Technologies vs. Shuttle |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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